v3.19.1
Note H - Subsequent Events
3 Months Ended
Mar. 31, 2019
Subsequent Events [Abstract]  
Note H - Subsequent Events

On April 4, 2019, we repaid Convertible Note (g) in the principal amount of $150,000 plus added principal of $15,000, plus $11,732 in accrued interest and $79,529 in prepayment penalties.

 

On April 24, 2019, in exchange for $38,188 in cash we extended the maturity date of Convertible Note (a) to May 15, 2020 and the conversion date to November 15, 2019.

 

On April 24, 2019 the Company issued a convertible promissory note with a face value of $88,000, maturing on April 24, 2020, and a stated interest of 10% to a third-party investor. The note is convertible at any time after 6 months of the funding of the note into a variable number of the Company's common stock, based on a conversion rate of 60% of the lowest trading price for the 20 days prior to conversion. The note was funded on April 25, 2019, when the Company received proceeds of $79,500, after disbursements for the lender's transaction costs, fees and expenses which in aggregate resulted in a total discount of $8,500 to be amortized to interest expense over the life of the note. Additionally, the note’s variable conversion rate component requires that the note be valued at its stock redemption value (i.e., “if-converted” value) pursuant to ASC 480, Distinguishing Liabilities from Equity, with the excess over the note’s undiscounted face value being deemed a premium to be added to the principal balance and amortized to additional paid-in capital over the life of the note. As such, the Company recorded a premium on the note of $58,666 as a reduction to additional paid-in capital based on a discounted “if-converted” rate of $0.40 per share (60% of the lowest trading price during the 20 days preceding the note's issuance), which computed to 366,666 shares of 'if-converted' common stock with a redemption value of $146,666 due to $0.40 per share fair market value of the Company's stock on the note's date of issuance. Debt discount amortization is recorded as interest expense, while debt premium amortization is recorded as an increase to additional paid-in capital.

 

On April 26, 2019 the Company issued a convertible promissory note with a face value of $63,000, maturing on April 26, 2020, and a stated interest of 12% to a third-party investor. The note is convertible at any time after 6 months of the funding of the note into a variable number of the Company's common stock, based on a conversion rate of 60% of the average of 2 lowest trading prices for the 15 days prior to conversion. The note was funded on April 29, 2019, when the Company received proceeds of $59,500, after disbursements for the lender's transaction costs, fees and expenses which in aggregate resulted in a total discount of $3,500 to be amortized to interest expense over the life of the note. Additionally, the note’s variable conversion rate component requires that the note be valued at its stock redemption value (i.e., “if-converted” value) pursuant to ASC 480, Distinguishing Liabilities from Equity, with the excess over the note’s undiscounted face value being deemed a premium to be added to the principal balance and amortized to additional paid-in capital over the life of the note. As such, the Company recorded a premium on the note of $58,227 as a reduction to additional paid-in capital based on a discounted “if-converted” rate of $0.39 per share (60% of the average of 2 lowest trading day prices during the 15 days preceding the note's issuance), which computed to 272,727 shares of 'if-converted' common stock with a redemption value of $121,227 due to $0.445 per share fair market value of the Company's stock on the note's date of issuance. Debt discount amortization is recorded as interest expense, while debt premium amortization is recorded as an increase to additional paid-in capital.

 

On May 1, 2019 the Company issued a convertible promissory note with a face value of $282,000, maturing on November 1, 2019, and a stated interest of 9% to a third-party investor. The note is convertible at any time after 6 months of the funding of the note into a variable number of the Company's common stock, based on a conversion rate of 60% of the average of 2 lowest trading prices for the 20 days prior to conversion. The note was funded on May 1, 2019, when the Company received proceeds of $253,300, after disbursements for the lender's transaction costs, fees and expenses which in aggregate resulted in a total discount of $28,700 to be amortized to interest expense over the life of the note. Additionally, the note’s variable conversion rate component requires that the note be valued at its stock redemption value (i.e., “if-converted” value) pursuant to ASC 480, Distinguishing Liabilities from Equity, with the excess over the note’s undiscounted face value being deemed a premium to be added to the principal balance and amortized to additional paid-in capital over the life of the note. As such, the Company recorded a premium on the note of $188,000 as a reduction to additional paid-in capital based on a discounted “if-converted” rate of $0.37 per share (60% of the average of 2 lowest trading day prices during the 20 days preceding the note's issuance), which computed to 1,277,173 shares of 'if-converted' common stock with a redemption value of $470,000 due to $0.368 per share fair market value of the Company's stock on the note's date of issuance. Debt discount amortization is recorded as interest expense, while debt premium amortization is recorded as an increase to additional paid-in capital.

 

On May 8, 2019, in exchange for $120,181 in cash we extended the maturity date of Convertible Note (i) to March 14, 2019, the prepayment date until November 14, 2019 and the conversion date to November 15, 2019.

 

Subsequent Stock Issuances

 

On April 3, 2019, the holder of note (c) converted $25,000 in principal and $1,479 in accrued interest into 126,092 shares of our common stock at a price of $.21 per share. 

 

As a condition of the $282,000 convertible promissory note issued on May 1, 2019, the Company issued 364,538 returnable shares to the lender as a commitment fee.

 

The Company has evaluated subsequent events through the date the financial statements were issued and filed with the Securities and Exchange Commission. The Company has determined that there are no such events that warrant disclosure or recognition in the financial statements, other than those disclosed above.